Advisors: How Not to Get Fired

If you want insight into how wealthy investors think — and how to keep them as clients — it would be hard to find a more informed source than Charlotte Beyer.

After 20 years on Wall Street, Beyer spent another two decades as founder and CEO of the Institute for Private Investors, a highly regarded and exclusive membership organization that specializes in sophisticated investor education, access to wealth and asset managers, and peer review. By the time she retired two years ago, she had heard all the deep dark secrets, frustrations and desires of wealthy clients and their advisors.

One chapter in her new book, Wealth Management Unwrapped, should get planners’ attention: “Can This Marriage Be Saved? Or, When to Fire Your Advisor.” Uh-oh.

Here’s what Beyer suggests to keep your wealthy clients happy:

1. Probe and get feedback. Don’t be afraid to find out what’s on clients’ minds. One way is to conduct an annual checkup: “Ask the client if there’s anything that has changed regarding what they expect, require or need,” Beyer says. “Tell them you want to know how to make this relationship better and stronger.” Another approach is to ask clients to share how you are different from other advisors they’ve had — for better or worse. But frame it as a personal request, not as part of a company questionnaire. “People don’t like being guinea pigs, but they do want to connect,” Beyer says. “Tell clients, ‘I’m trying to do a better job and I need your help.’ ”

2. Be diplomatic about demands. Consumers are told that demanding clients make better advisors. But advisors need to run a profitable business, which means they can’t always drop everything to accommodate one client at the expense of others. What to do? “Try to get ahead of the client,” Beyer suggests. “Anticipate their needs and try to accommodate them on a schedule that works for you and them.”

3. Be consistent. “One of the biggest mistakes advisors make is that they speak out of both sides of their mouth,” Beyer says. “They praise and promise a long-term outlook and strategy but inundate clients with data and reports every month or every three months. It sends the wrong signal.” The solution? Emphasize the long-term approach and ask clients how often they need to see reports; make short-term data available but suggest annual reviews.

4. Overcommunicate. The biggest reason advisors get fired? “It’s always about communication — usually a lack of — every time,” Beyer says. Clients are naturally concerned about portfolio performance, but disappointment or anger over results can be mitigated by effective communication. “Stay in touch with the client and review their investment goals with them,” Beyer counsels. “If an investment isn’t doing well, let them know early what’s going on and discuss whether it’s better to ... ride it out or not. Clients don’t want to be surprised by bad news.”